Safire nursing homes agree to pay $9 million to resolve fraudulent Medicare and Medicaid billing allegations

BUFFALO, N.Y. - U.S. Attorney Michael DiGiacomo announced today that Safire Rehabilitation of Northtowns, LLC, Safire Rehabilitation of Southtowns, LLC, and Williamsville Suburban, LLC, have agreed to pay $9,000,000 to resolve allegations arising under the Federal False Claims Act and the New York False Claims Act regarding false claims submitted to Medicare and Medicaid. This action is part of the Trump Administration's Task Force to Eliminate Fraud.

The United States alleges that between approximately January 1, 2015 and approximately October 1, 2019, Safire submitted false claims to the Medicare and Medicaid programs for skilled rehabilitative therapy services that Safire knew were not reasonable or necessary, supported by the documentation in medical records, documented as provided, or provided at all. The United States specifically alleged that Safire fraudulently inflated reimbursements from the Medicare and Medicaid programs by: (a) scheduling skilled rehabilitative therapy and setting skilled rehabilitative therapy goals for residents based on the reimbursement policies of the residents' insurer, rather than medical need, such that Medicare and Medicaid beneficiaries were scheduled for more skilled rehabilitative therapy than was necessary; (b) pressuring treating therapists to provide therapy even when treating therapists recommended against therapy; (c) pressuring residents to attend therapy sessions even after the residents repeatedly refused to participate; and (d) manufacturing and/or altered therapy referrals and medical records to justify unreasonable and unnecessary therapy.

"Medicare and Medicaid fraud drains taxpayer funds and weakens these vital government programs", stated U.S. Attorney DiGiacomo. "This settlement reinforces our commitment to safeguarding federal funds and ensuring seniors receive the care they deserve."

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

The civil settlement is the result of a matter brought under the qui tam or whistleblower provisions of the False Claims Act in the matter captioned United States and the State of New York ex rel. Ciavarella v. Safire Rehabilitation of Northtowns, LLC., et al., 20-cv-07078-EAW (W.D.N.Y.). Of the $9 million settlement, $5.4 million constitutes the federal portion of the recovery and $3.6 million constitutes a recovery for State Medicaid programs. The Relator/whistleblower will receive a share of the federal recovery in this case.

The resolution of this matter was the result of a coordinated effort between the U.S. Attorney's Office for the Western District of New York, the U.S. Department of Health and Human Services Office of Inspector General, and the New York State Attorney General's Office Medicaid Fraud Control Unit. Assistant U.S. Attorney David M. Coriell and Investigator Peggy McFarland handled the matter on behalf of the U.S. Attorney's Office.

The investigation and resolution of this matter illustrate the government's emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the U.S. Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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